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Volume 712: debated on Tuesday 14 July 2009


Asked By

To ask Her Majesty’s Government when they expect national unemployment figures to begin to fall.

My Lords, I thank the noble Lord for that Answer, which does not take me anywhere at all. So I am going to press the Minister and say to him that, while unemployment is rising, my party wants unemployment to be reduced.

Thank you very much, my Lords. When do the Government believe that the peak in unemployment will be reached and what are they doing at the moment to try to continue to reduce unemployment?

My Lords, I am delighted to know that the noble Lord’s party, given the chance, would seek to reduce unemployment. We need to see how the party’s public expenditure plans would be consistent with that aspiration.

I repeat that the Government do not publish unemployment forecasts. Clearly, a range of data is looked at, including the AME figures available in the Budget, and various workload projections which relate to resource allocation. If the noble Lord is asking what the Government are doing about unemployment, I would say they are doing lots. Indeed, those workload projections are the basis for securing resources from the Treasury. They include, for example, the £1.3 billion that was achieved in November 2008, a further £1.7 billion for Jobcentre Plus and providers in the Budget 2009, and a further £1 billion for the future jobs fund aimed at creating 150,000 new jobs. This Government are doing plenty. They are an active Government who believe that the state should be active in seeking to address unemployment and support people who have lost their jobs.

My Lords, my noble friend is quite right not to make a forecast or guess, as most of the best economists in the world are doing. Does he accept that, despite everything that the Government are, rightly, trying to do to keep unemployment down, it is, sadly, likely to rise in the near future at least? However, is it likely to reach the kind of levels that it reached in the years when the noble Lord, Lord Lawson, was in charge of our economic affairs?

My Lords, my noble friend will be aware that there is a relationship with GDP, and unemployment is generally seen as being a lagging indicator. However, if my noble friend is asking me about current employment or unemployment levels in comparison to the historical position, I can say that employment levels are at about 29 million and we will get the updated figures tomorrow. That compares with the 1980s when the figure at its worst was 23 million. There has been a 5.5 million increase since then. The claimant-count-to-unemployment rate was at 4.8 per cent last month. It was pretty much double that in the 1992-94 recession.

My Lords, have the Government made any estimate of the impact on unemployment totals of the new test for disability benefit claimants; and, if so, what is it?

My Lords, the noble Lord is referring to the employment and support allowance. This was introduced only in October last year, so it is far too early to assess how it is working. There has been some press speculation around that, but until there has been a full year at least for it to settle into a steady state of introduction, it is too early to make any significant estimate.

My Lords, you do not have to be one of the world’s greatest economists to work out that unemployment will reach its peak more or less about the middle of next year, given the underlying dynamics. Does my noble friend agree that the real worry for the country, given what passes for an economic policy on the part of the Official Opposition—most of us have great difficulty working through it to see whether they actually have a policy—is that they might win an election and we will have a double-dip recession in which unemployment, having reached its peak by that time, will start to go up again?

My Lords, my noble friend is a far better economist than I could ever hope to be and far be it from me to do other than support his analysis. We know from history the other party’s approach to this. In previous recessions, it put people on inactive benefits and left them there, with no support and no help to get back into employment. That is the key difference between our two parties. We believe in an active state that will support people when they fall out of work and will help, support and encourage them back into employment.

My Lords, perhaps I may refer to the Financial Times article yesterday on the work capability assessment. The Financial Times reported that figures were circulating among welfare intermediaries about the remarkable results of that assessment. When can the House see those figures?

My Lords, I thank the noble Lord for his question and welcome him to his new duties on the Front Bench. We look forward to working with him over many months. I repeat that any assessments in relation to the employment and support allowance are premature. The scheme was introduced only in October last year. The work capability assessment is not yet fully in a steady state. It will make a significant improvement. I will refer the noble Lord to one of his own comments in respect of our approach to these things. In an important report that he produced, he said:

“The Government has made strong, and in some respects remarkable, progress over the last ten years”.

I commend his judgment.

My Lords, if the Minister cannot predict when unemployment will drop, perhaps he can tell us when the large stimulus programmes, particularly those for energy, will come to fruition and thereby help the employment situation.

My Lords, much of the stimulus programme is working its way through the economy and helping us to make sure that there are more people in work than would otherwise have been the case. We estimate that half a million people are now in work who would not have been if we had not adopted the fiscal stimulus and other components that we have debated on a number of occasions in the House.